Dialogue with an investment focus Azerbaijan and China strengthen cooperation

Cooperation between Azerbaijan and China across various formats has in recent years taken on the character of a strategic partnership, with an emphasis on expanding trade and investment ties. Alongside traditional cooperation in logistics and infrastructure projects, Chinese companies are localising projects in Azerbaijan in the fields of industry, “green” energy, and IT technologies.

To increase the number of such projects, the two countries are considering the establishment of a Joint Investment Fund. At the same time, China’s vast economy is attracting investors from Azerbaijan: in 2025 alone, the volume of Azerbaijani investments increased 3.6 times.

These trends were the focus of the Azerbaijan–China forum on investment and trade cooperation, recently held in Guangzhou.

Against the backdrop of significant shifts in the global economy, trade, and logistics, business cooperation between Azerbaijan and the People’s Republic of China (PRC) has in recent years taken on the character of a strategic partnership. Moreover, it is gradually reaching a qualitatively new scale: if around seven years ago economic ties were mainly based on trade, today they encompass a much broader range of areas — from investment and infrastructure projects to energy and transit.

Recent trade turnover data confirms that Azerbaijan remains one of China’s key economic partners in the South Caucasus region, accounting for more than half of the region’s total trade with the PRC. It should be noted that in 2024, bilateral trade increased by 21%, reaching $3.7 billion, and this momentum accelerated further in 2025, rising to $4.87 billion, marking a 30.2% year-on-year increase.

According to the State Customs Committee of the Republic of Azerbaijan, Azerbaijan–China trade has generally maintained a positive trajectory in the current year as well: in the first quarter of 2026, mutual trade grew by 7.3%, reaching over $1.103 billion. At the same time, official statistics show that Azerbaijani exports to China increased by 25.2% over the reporting period.

In recent years, the main driving force behind the expansion of Azerbaijani companies’ exports to the vast Chinese market has been the initiatives of the Ministry of Economy and its affiliated body — the Azerbaijan Export and Investment Promotion Agency (AZPROMO).

Thanks to the efforts of these institutions, the number of trade and business missions from Azerbaijan to China has increased significantly. Azerbaijani entrepreneurs actively participate in major Chinese exhibitions, seeking partners through the “Invest in Azerbaijan” platform. At the same time, Azerbaijani trade and wine houses are actively promoting products under the “Made in Azerbaijan” brand.

Currently, Azerbaijani trade houses operate in Qingdao, Chengdu, Xi’an, Zhangjiajie, and, since May 2024, also in Nanjing. In addition, branches of Azerbaijani trade houses are active in Shanghai, Harbin, Jinan, and Wuhan, while three wine houses have been established in Urumqi and Shanghai.

Notably, in addition to petroleum products, Azerbaijan also supplies China with goods from the chemical and processing industries. Azerbaijani companies successfully export poultry and wine products, juices, jams, honey, vegetable oils, canned fruits and vegetables, and a wide range of other food industry goods.

Baku is interested in further increasing the supply of non-oil products to the Chinese market, while cooperation in attracting Azerbaijani investment into Chinese enterprises and other business projects is also being actively promoted.

According to data from the Central Bank of Azerbaijan, in 2025, the country invested $9.957 million in direct investments into China’s economy, which is 3.6 times higher compared to 2024. By comparison, a year earlier this figure stood at just $2.8 million.

Azerbaijan directs its direct investments into China’s logistics infrastructure, including projects under the “Belt and Road Initiative,” as well as into the oil and gas sector (through participation in Chinese retail and distribution networks), while also increasing its share in local commercial and trade projects.

At the same time, investments are being channelled into equity stakes in Chinese enterprises specialising in technologies and equipment manufacturing for renewable energy sources (RES), thereby supporting Azerbaijan’s domestic energy transition programme.

The expansion of Azerbaijan–China trade and investment cooperation was the focus of a forum recently held in Guangzhou, Guangdong Province, under the slogan “Supporting Companies, Access to Foreign Markets.”

The choice of location was far from accidental: Guangdong’s economy is estimated at over $2.1 trillion, accounting for more than 10% of China’s national GDP, and it has ranked first among all Chinese regions for over 37 consecutive years.

The event, held with the support of the Azerbaijani Trade Representation in China, brought together representatives of Azerbaijani government institutions, business associations, exporting companies, and investors. Azerbaijani Trade Representative in China Teymur Nadiroghlu, who provided information on the country’s business environment, outlined the key objectives of the forum. These included promoting Azerbaijan’s business and investment climate in Guangdong Province, as well as expanding the supply of “Made in Azerbaijan” products to this key Chinese market.

During the forum, Wang Weiwei, Director General of the China-Foreign Economic Cooperation Science and Trade Company — the operator of the Azerbaijani trade house in Beijing — spoke about the activities of Azerbaijani trade houses in China and the efforts undertaken to expand distribution channels for high-quality Azerbaijani food products and beverages in the vast Chinese market.

The forum also featured a presentation that provided participants with detailed information on the privileges and incentives available to investors who invest in and implement projects in Azerbaijan.

“Azerbaijan’s advantageous geographical location, transit capabilities, access to regional markets, as well as a favourable investment environment, create new opportunities for Chinese companies and investors,” said Guan Xianming, Secretary-General of the Guangdong Provincial Federation of Industry and Commerce. He also highlighted the broad potential for developing Azerbaijan–China business ties, including in the non-oil sectors of the economy.

Investment interest from Chinese businesses in Azerbaijan has indeed been significant, as reflected in investment dynamics over the past two years. In 2024, Chinese direct investments in Azerbaijan amounted to $17.6 million, increasing to $26.895 million last year. This growth indicates that bilateral cooperation is gradually moving from commercial initiatives towards long-term investment projects.

Today, around 370 companies with Chinese capital are registered in Azerbaijan, while the total volume of Chinese investments in the country’s economy has reached $950 million.

The past year proved particularly productive in this regard, as several Chinese companies signed agreements with Azerbaijan to implement five new renewable energy (RES) projects, including the construction of photovoltaic and wind power plants with a total installed capacity of 1,570 MW, as well as the deployment of battery energy storage systems (BESS) in the country.

In turn, the Chinese company Sichuan Sunsync Photovoltaic Technology plans to facilitate technology transfer and co-finance a solar panel manufacturing facility in the Alat Free Economic Zone, with the possibility of exporting part of its output.

Agreements have also been signed with Chinese companies on joint projects in high technologies and innovation, cooperation in the digitalisation of industry and the agricultural sector, as well as in wastewater treatment, recycling, and reuse, and the optimisation of water resource management operations.

Industrial cooperation is also expanding. Chinese company BYD Company Limited has established a joint venture, Electrify Azerbaijan, for the large-scale assembly of electric buses in the Sumgayit Chemical Industrial Park.

At the same time, a private Chinese investor plans to construct the Fujiai Azerbaijan plant in the Aghdam Industrial Park for the production of elevators and escalators using Chinese components.

A tangible breakthrough in joint production initiatives is expected within the framework of a new cooperation mechanism — the creation of a joint investment fund between the Azerbaijan Investment Holding and the Silk Road Fund of China.

Negotiations on this new financial instrument have already been agreed at the leadership level of the respective investment institutions. If established, the fund could finance specific projects in infrastructure, logistics, industry, and energy sectors.